Legislature Passes State Budget as Lawmakers Look to Close 2016 Session

April 27, 2016

Budget calls for phase out of Hall Income Tax and increased property tax relief for 100 percent service-related disabled veterans and elderly disabled

NASHVILLE, (April 14, 2016) – The Tennessee Senate and House of Representatives passed several key bills this week, including the state budget, as the 2016 session of the Tennessee General Assembly draws to a close.The $34.9 billion debt-free budget proposes state government spending for the next fiscal year that begins July 1, 2016 and extends to June 30, 2017.

“Senate Bill 2653 is the Balanced Budget Act of 2016,” said Senate Majority Leader Mark Norris (R-Collierville), sponsor of the legislation.“It focuses on the ‘four Es’ of Tennessee – employment, education, economic opportunity and enforcement of the law.The balanced budget is ‘job one’ because it not only demonstrates our stewardship of the taxpayers’ property, but it reflects upon our ability to assure the best return on their investment of precious resources and undergirds our constitutional responsibility to provide for the peace, safety and happiness of the people of Tennessee.”

Among two key provisions in the budget is one which calls for the phase out of Tennessee’s Hall Income Tax on interest and dividend income from investments.Since enactment of the Hall tax in 1929, the use of investment savings has grown as a primary source of retirement income.The current tax rate is six percent applied to all taxable interest and dividend income over $1250 per person and $2500 for married couples filing jointly.The legislation calls for cutting the tax by one percent this year, with the legislative intent to eliminate it by 2021.

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